Amazon Kindle Fire Scorches Samsung Market Share

Amazon’s Kindle Fire has had a dramatic impact on the fledgling and struggling
Android tablet market by challenging Samsung’s dominance of the market in just three months. According to app analytics firm Flurry, the Fire
was responsible for 35.7% of all Android tablet app sessions in January 2012, up from only 3% in November when the tablet was launched mid-
month.

That sharp increase in share has pulled the Samsung Galaxy Tab from a 63% share in November to 35.6% in January. Other devices
such as the Motorola Xoom, Asus Transformer, Acer Iconia Tab and Toshiba Thrive are all at 7% or under in dividing the rest of the market.

Flurry’s analysis is based on app sessions, not devices sold -- so part of the share increase also reflects the high level of app downloads
and usage among early Fire adopters. Nevertheless, As Flurry VP of Marketing Peter Farago points out in his blog post on the new data, Amazon has succeeded so far in knocking a hardware giant off its
perch by taking a page from Apple itself.

Amazon focused less on the Android operating system and the device and more on content, Farago
argues. With pre-launch alliances already in place with Facebook, "Angry Birds" and its own Amazon Prime instant video offerings, the company was
selling the experience -- not the gadget or Android.

And by tying the device in with its own massive e-commerce infrastructure, it made buying
content much more seamless than finding it on other Android-based devices. In comparing the ratio of paid downloads between the Galaxy Tab and Kindle
Fire, Flurry found that among the top 5 fee-based apps in the Android App Store and the Amazon App Store, the Fire was driving two-and-a-half times
more paid downloads than the Galaxy.

For Amazon, a $199 low price point established a quick scaling up of device penetration, and then an
effortless ordering system allowed for easy revenue generation. Farago writes: “Amazon, who once moved the world from buying goods at retail to
buying them online and having them shipped to doorsteps, is now distributing the new form of mobile store via tablets.

In a move that
reduces the possibility of its own disintermediation, Amazon’s distribution model starts with its own roots: books, music and video (aka
“BMV”). Through this move, Kindle Fire is changing the rules of engagement on the Android platform to shape the playing field into
one where they, the consumer and the developer win.”